These days I just keep hearing Bowie over and over and over.
Ch-Ch-Ch-Changes, Turn and face the strain, Ch-Ch-Ch-Changes
In about a little over a month FNMA is scheduled to release Desktop Underwriter 8.0.
I'm just soooooo excited!
Why you may ask? What's the BIG deal?
Well here you are.
The maximum allowable total expense ratio in DU will be revised to 45%, with flexibilities to 50% for certain loan cases with strong compensating factors. Deals exceeding the ratio will be given an ineligible.
Just a couple of thoughts which immedikately come to mind;
I used to feel I had a real good handle on what an Underwriter would consider as a compensating factor, but i don't necessarily feel so confident these days. Yesterdays compensating factor may not be accepted today.
They are now effected by mood swings, the location of the planets, things like that!
Fewer buyers will qualify under the new guidelines!
Get em while they're hot! Today's buyers may be looking at less house next month. That may make them very unhappy.
Watch out for this one!
Buyers currently preapproved may no longer be able to exercise their current preapproval.
If you didn't like preapproval letters before, you may like them less next month.
Check the date on the preapproval letter!
Now let's look at the BIG picture!
From a lenders standpoint the changes are prudent, responsible, and should have been implemented sooner.
Just my opinion? I don't think so.
Well let's get ready for this now, as it'll be upon us before we realize it. Those buyers who just must have the home that they will no longer qualify for need to enter into contract now and close in a timely fashion.
Look out! those sneaky lenders are apt to start making these type of changes now, in anticipation of Fannie's doing so.
Maybe Bowie shouldn't get all the glory, how about Bobbie Dylan,
"and the times they are a changin"
Yes they are and;
A BIG ONE's comin our way!
;)
;)
The last year for sure has shown us that an underwriter's decision is only positive when the earth, the moon, the planets are perfectly aligned (as long as it is not THAT TIME OF THE MONTH, otherwise forget it) I do agree things got out of whack. APPROVE ANYTHING was the mantra. We have to find some balance and get back to common sense.